Fuel prices rise in Punjab due to hike in VAT on petrol, diesel

Fuel prices are expected to rise in Punjab with the state cabinet on Thursday deciding to increase value-added tax (VAT) on petrol and diesel by 61 paise per liter and 92 paise per liter respectively.

A meeting of ministers chaired by Punjab Chief Minister Bhagwant Mann took a decision in this regard.

Currently, petrol retails at Rs 97.01 per liter in Mohali and diesel at Rs 87.21 per liter.

Fuel is already more expensive in Punjab than in Chandigarh.

In the Union Territory of Chandigarh, petrol and diesel prices are Rs 94.24 and Rs 82.40 per liter respectively.

Fuel pump owners have strongly condemned the AAP-led government's decision, saying it will severely hit their business.

They further said that this is the third time in the last two and a half years that the Bhagwant Mann-led government has increased fuel prices.

Finance Minister Harpal Singh Cheema, while addressing the media after the Cabinet meeting, said that it has been decided to increase VAT on petrol and diesel.

He said the VAT on petrol will be increased by 61 paise per liter and on diesel by 92 paise.

Cheema said the hike in VAT on fuel will lead to an increase in diesel revenue of Rs 3.95 billion and petrol revenue of Rs 1.5 billion.

In response to the increase in VAT on fuel, Monty Sehgal, spokesman of the Punjab Petrol Pump Dealers Association, criticized the state government's decision.

He said with the increase in VAT on fuel, petrol and diesel sales in border areas would be affected as their business would shift to neighboring countries where fuel is cheaper.

Ashwinder Singh Mongia, owner of Mohali fuel pumps, said the move would encourage more fuel “smuggling” and ultimately lead to less tax revenue in the state.

He said fuel is cheaper in Himachal Pradesh, Jammu and Kashmir than in Punjab.

(This report has not been edited by News18 staff and is published from United News Agency-PTI)